The management of Zigby Manufacturing prepared the following balance sheet for March 31. Assets ZIGBY MANUFACTURING Balance Sheet March 31 Liabilities and Equity $ 80,000 Liabilities Cash $ Accounts receivable 455,000 Accounts payable 215,700 Raw materials inventory 93,400 Loan payable 32,000 Finished goods Long-term note 438,000 500,000 $747,700 inventory payable $ Equipment Equity 640,000 Less Accumulated 170,000 470,000 Common stock 355,000 depreciation Retained earnings 433,700 $ Total liabilities and 788,700 $ Total assets 1,536,400 equity 1,536,400 To prepare a master budget for April, May, and June, management gathers the following information. a. Sales for March total 25,000 units. Budgeted sales in units follow: April, 25,000; May, 17,100; June, 22,300; and July, 25,000. The product's selling price is $26.00 per unit and its total product cost is $21.90 per unit. b. Raw materials inventory consists solely of direct materials that cost $20 per pound. Company policy calls for a given month's ending materials inventory to equal 50% of the next month's direct materials requirements. The March 31 raw materials inventory is 4,670 pounds. The budgeted June 30 ending raw materials inventory is 6,000 pounds. Each finished unit requires 0.50 pound of direct materials. c. Company policy calls for a given month's ending finished goods inventory to equal 80% of the next month's budgeted unit sales. The March 31 finished goods inventory is 20,000 units. d. Each finished unit requires 0.50 hour of direct labor at a rate of $16 per hour. e. The predetermined variable overhead rate is $4.00 per direct labor hour. Depreciation of $40,787 per month is the only fixed factory overhead item. f. Sales commissions of 10% of sales are paid in the month of the sales. The sales manager's monthly salary is $5,000. g. Monthly general and administrative expenses include $21,000 for administrative salaries and 0.9% monthly interest on the long-term note payable. h. The company budgets 30% of sales to be for cash and the remaining 70% on credit. Credit sales are collected in full in the month following the sale (no credit sales are collected in the month of sale). i. All raw materials purchases are on credit, and accounts payable are solely tied to raw materials purchases. Raw materials purchases are fully paid in the next month (none are paid in the month of purchase). j. The minimum ending cash balance for all months is $80,000. If necessary, the company borrows enough cash using a loan to reach the minimum. Loans require an interest payment of 1% at each month-end (before any repayment). If the month-end preliminary cash balance exceeds the minimum, the excess will be used to repay any loans. k. Dividends of $30,000 are budgeted to be declared and paid in May. I. No cash payments for income taxes are budgeted in the second calendar quarter. Income tax will be assessed at 35% in the quarter and budgeted to be paid in the third calendar quarter. m. Equipment purchases of $100,000 are budgeted for the last day of June. Required: Prepare the following budgets for the months of April, May, and June: 1. Sales budget. 2. Production budget. 3. Direct materials budget. 4. Direct labor budget. 5. Factory overhead budget. 6. Selling expense budget. 7. General and administrative expense budget. 8. Schedule of cash receipts. 9. Schedule of cash payments for direct materials. 10. Cash budget. 11. Budgeted income statement for entire second quarter (not monthly). 12. Budgeted balance sheet at June 30. Req 1 Req 2 Req 3 Req 4 Req 5 Re Sales budget. ZIGBY MANUFACTURING Sales Budgets April May June Budgeted sales units Selling price per unit Total budgeted sales Req 1 Req 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 1 Production budget. ZIGBY MANUFACTURING Production Budget April May June Total Budgeted sales units Next period budgeted 17,100 22,300 25,000 sales units Ratio of inventory to 80% 80% 80% future sales Desired ending inventory units Total required units Units to produce Req 1 Req 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 1 Direct materials budget. (Round per unit values to 2 decimal places.) ZIGBY MANUFACTURING Direct Materials Budget Units to produce Materials needed for production (pounds) Total materials required (pounds) Materials to purchase (pounds) Materials cost per pound Cost of direct materials purchases April May June Req 1 Req 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 10 Direct labor budget. (Round per unit values to 2 decimal places.) Units to produce Direct labor hours needed Cost of direct labor ZIGBY MANUFACTURING Direct Labor Budget April May June Total Req 1 Req 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 to R 10 Factory overhead budget. (Round variable overhead rate values to 2 decima Direct labor hours needed ZIGBY MANUFACTURING Factory Overhead Budget April Variable overhead rate per direct labor hour Budgeted variable overhead Budgeted fixed overhead Budgeted total factory overhead May June Total Req 1 Req 2 Req 3 Req 4 Req 5 Req 6 Req Req 7 10 Selling expense budget. ZIGBY MANUFACTURING April Selling Expense Budget May June Budgeted sales Sales commissions Req 1 Req 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 to 10 R General and administrative expense budget. ZIGBY MANUFACTURING General and Administrative Expense Budget Total general and administrative expenses April May June Req 1 Req 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 to Req 11 Req 12 10 8. Schedule of cash receipts. 9. Schedule of cash payments for direct materials. 10. Cash budget. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign.) ZIBGY MANUFACTURING Schedule of Cash Receipts April May June $650,000 $444,600 $579,800 Sales Cash receipts from Cash sales Collections of prior period sales Total cash receipts Schedule of Cash Payments for Direct Materials Materials purchases Cash payments for Current period purchases Prior period purchases Total cash payments April $ 199,700 $228,600 $242,300 Cash Budget April May June Beginning cash balance Total cash available Less: Cash payments for: Total cash payments Preliminary cash balance Ending cash balance Loan balance April May June Loan balance - Beginning of month Additional loan (loan repayment) Loan balance - End of month $ 0 < Req 7 Req 11 > Show less Req 1 Req 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 to 10 Req 11 Budgeted income statement for entire second quarter (not monthly). (Round your answers to the nearest whole dollar.) ZIGBY MANUFACTURING Budgeted Income Statement For Three Months Ended June 30 Selling, general and administrative expenses Total operating expenses Req 1 Req 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 to Req 11 Req 12 10 Budgeted balance sheet at June 30. (Round your final answers to the nearest whole dollar.) ZIGBY MANUFACTURING Budgeted Balance Sheet June 30 Assets Total assets Liabilities Equity Liabilities and Equity Total Liabilities and Equity